The government will instead seek to amend legislation that
caps foreign ownership of Qantas, Abbott told reporters
following a Cabinet meeting today.

“Cabinet is not proposing at this time, on the evidence
before us, to offer Qantas a debt guarantee or a line of
credit,” Abbott said. “I have enormous faith in the ability of
Qantas to compete and to flourish, but I think it is best placed
to compete and to flourish if it is unshackled and un-propped up
by government.”

Qantas Chief Executive Officer Alan Joyce has argued the
carrier can’t compete in a domestic fare war with Virgin
Australia Holdings Ltd. (VAH), whose three biggest shareholders are
state-controlled foreign airlines that he says want to weaken
Qantas’s international business. The company, which was stripped
of its investment-grade ratings, posted a A$252 million loss
last week and said it will sell or delay delivery of more than
50 planes and freeze pay until the company returns to profit.